ALBAWABA — The chairman of Saudi National Bank resigned on Monday, weeks after his comments facilitated and worsened the collapse of troubled bank Credit Suisse.
Ammar Al-Khudairy stepped down "due to personal reasons", the bank's board of directors said in a statement published on Tadawul, the Saudi Stock Exchange.
On March 15, Al-Khudairy's comments fueled investor panic, sinking Credit Suisse shares 24 percent during that session, despite just echoing SNB’s previous position that it did not intend to expand its holdings beyond its then 9.9 percent interest as Credit Suisse’s largest shareholder.
The then-SNB chairman said the Saudi bank would not intercede “for many reasons outside the simplest reason, which is regulatory and statutory”, crashing Credit Suisse shares further.
"If you look at how the entire banking sector has dropped, unfortunately, a lot of people were just looking for excuses," Al-Khudairy told CNBC, in the aftermath of his initial comments.
"It's panic, a little bit of panic. I believe completely unwarranted, whether it be for Credit Suisse or for the entire market," added Al-Khudairy, belittling the huge avalanche he had helped unleash.
The following day, Credit Suisse rallied on the stock market after it got a $54 billion central bank lifeline in a bid to restore investor confidence.
On March 19, Credit Suisse was acquired by Zurich rival UBS for 3 billion Swiss francs, in a Swiss government brokered union.
SNB lost over $1 billion or 80 percent of its investment in Credit Suisse during the takeover, as UBS paid shareholders a heavily discounted price per share under the terms of the rescue agreement.
SNB paid 3.82 Swiss francs a share when it bought its stake during a fundraising drive, which was meant to shore up Credit Suisse’s balance sheet and support its restructuring plans, recovered only 0.76 Swiss francs a share from the USB takeover deal.
In a statement, SNB noted that its investment in Credit Suisse made up less than 0.5 percent of its total assets and 1.7 percent of its investment portfolio.
"Changes in the valuation of SNB’s investment in Credit Suisse have no impact on SNB’s growth plans and forward looking 2023 guidance," the bank said.
Saeed Mohammed Al Ghamdi, who had been serving as SNB's chief executive officer, will replace Al-Khudairy as chair, while Talal Ahmed Al Khereiji was appointed acting CEO, the statement to Tadawul said.
SNB is Saudi Arabia's largest commercial bank, a product of a 2021 union between the National Commercial Bank and the Samba Financial Group.
Saudi Arabia has encouraged the consolidation of its financial entities amid Crown Prince Mohammed bin Salman’s broader Vision 2030 push to diversify the kingdom’s revenues and economic growth prospects away from reliance on oil revenues.